It is with no doubt that there has been an unmissable shift in the world. The novel Coronavirus known as COVID-19 has begun to reshape our lives into what is being widely termed a new normal at a very phenomenal speed. Even the old dogs have to adapt to the new tricks which may have been unexplored because, let’s face it, who would have ever thought that the entire globe would be, in days or weeks have entire workforces working remotely. It has arguably been dismissed as a futuristic school of thought, something we may only do well into the full swing of the 4th industrial revolution, writeDAVE BAAITSE and LERATO MOSIELELE.
Familiar ways of working are fast becoming obsolete, being able to be agile and adjust to the new normal is key, now more than ever. The life of a Mochudi Street Vendor who specializes in Beauty Parlour has significantly changed overnight.
Her ordeal began when government announced State of Emergency and a 28 day lockdown, technically crippling her small and fragile business which has the capacity to bring home at least P3, 000 home in a good month covering both her rentals and bills.
Talking to WeekendPost from Mochudi this week Tebogo Moara who also doubles as a make- up artist said she last had a meal four days ago. “I share a two and half with a colleague who is also a Street Vendor, our hopes at the moment were pinned on social workers but they have since turned their back on us. Life is tough, our electricity units at the moment reads 6.0 megawatts, and we have given everything to God now”.
Their confrontation with the social workers this week did not bear any fruits, after assessment they were told that they will receive a call same day. Upon realising that two days has passed they took it upon themselves to call but were told that they are abled women who could have known better that these situations do happen and could have saved for the future.
“We share a P1, 500 rentals which is already due but no answers are coming forth from government concerning rentals,” she said. As reality is kicking in, governments have had to swiftly formulate COVID-19 policies, to mitigate the further spread and transmission of the virus.
Travel is cancelled and non- existent especially cross border travel in our region leaving room for essential goods only. Life has come to a standstill, the entire world is needed to stay connected and aligned on various issues, including work, on communication platforms made to facilitate remote working.
A culture shift is inevitable as we navigate this new normal as we move into the future with different types of working environments. In hind sight, amidst the acute sense of loss, anxiety and insecurity COVID-19 has brought on all fronts one cannot ignore how the outbreak has brought some sense of unity particularly in terms of rapid responses to a global problem.
In a more intricate level, far beyond people introspecting and realigning their goals towards what really matters, people are more appreciative of locally made produce and are embracing a rebirth or reawakening approach to life.
The digital space is also bursting at the seams with innovations that are transforming our lives daily. Highly welcomed by all who love nature, a great improvement has been seen recently in terms of pollution or man and nature interference with Mother Nature replenishing the earth and reviving badly damaged ecosystems.
A new normal culture that may surely prevail when the dust settles on this front is surely to include working remotely. Companies eager to survive would need to set up and make adjustments for remote working conditions and maintain efficiency under these circumstances.
It’s time to think innovatively lest you perish. A famous pioneer once said, “Innovate or die”. The way the world is going is such that only the tech savvy will survive as we enter the 4th industrial revolution (4IR). Embrace tools to keep you connected to your clients and key stakeholders while enabling efficiency.
Virtual approaches will also, surely boom in popularity as we innovate to create experiences and engage in the virtual realm, as opposed to engaging physically, which goes against gatherings and other social distancing no nos. Events of any kind have been put to an abrupt halt and this calls for innovative thinking to be able to still engage with audiences.
In reality, we cannot ignore the shift that has happened due to the COVID-19 pandemic, a shift that now leaves us with this “new normal”. The effects of the pandemic are said to be envisioned to be experienced by the world for at least the next year or so but the remnants of the pandemic, devoid of the apocalyptic effect it has had on the world, will see some elements of our lives improved like the way we work and think from an innovation point of view.
We are living in a moment of history. It is up to all of us to adapt or be left behind by a fast moving world. While addressing the nation South African President Cyril Ramaphosa, a few days ago said, “The coronavirus pandemic has disrupted your lives and damaged our economy.
Its severity will continue to take a heavy toll in the weeks and months to come. The pandemic has resulted in the sudden loss of income for businesses and individuals’ alike, deepening poverty and increasing hunger. The urgent and dramatic measures we have taken to delay the spread of the virus have been absolutely necessary. They have given us the space to better respond to the inevitable rise in infections and to thereby save tens of thousands of lives.
We are now embarking on the second phase of our economic response to stabilize the economy, address the extreme decline in supply and demand and protect jobs. As part of this phase, we are announcing a massive social relief and economic support package of R500- billion, which amounts to around 10% of GDP”.
Here at home many Batswana continue to criticize their own government for failing to cushion them during this crisis and coming up with rigorous policies that guide the lockdown. In his last public address President Mokgweetsi Masisi detailed a raft of financial interventions that include a loan repayment holiday of between three and six months for home and vehicle loans to cushion those affected by the lockdown. He also said the country would build up reserves including grain, water, medical supplies and fuel.
This week Minister of Mineral Resources, Green Technology & Energy Security, Mr Lefoko Moagi announced reduction in petroleum prices. He explained that the decrease on petroleum products prices was influenced by the general decline of international oil prices, which have been going down mainly as a result of reduced global demand driven predominantly by the slowdown of the world economy.
The price adjustment, which commenced on April 21 decreased retail prices for petrol grades by 13 thebe per litre, diesel by 10 thebe per litre and prices for illuminating paraffin decreased by 20 thebe per litre. Speaking during a press briefing, Moagi said the government would closely monitor the prices of petroleum products in both regional and international markets and make the necessary price adjustments every three months.
Mowana Copper Mine in Dukwi will finally pay its former employees a total amount of P23, 789, 984.00 end of this month. For over three years Mowana Copper Mine has been under judicial management. Updating members, Botswana Mine Workers Union (BMWU) Executive Secretary Kitso Phiri this week said the High Court issued an order for the implementation of the compromise scheme of December 9, 2021 and this was to be done within 30 days after court order.
“Therefore payment of benefits under the scheme including those owed to Messina Copper Botswana employees should be effected sometime in January latest end of January 2022,” Kitso said. Kitso also explained that cash settlement will be 30 percent of the total Messina Copper Botswana estate and negotiated estate is $3,233,000 (about P35, 563,000).
Messina Copper was placed under liquidation and was thereafter acquired by Leboam Holdings to operate Mowana Mine. Leboam Holdings struck a deal with the Messina Copper’s liquidator who became a shareholder of Leboam Holdings. Leboam Holdings could not service its debts and its creditors placed it under provisional judicial management on December 18, 2018 and in judicial management on February 28, 2019.
A new company Max Power expressed interest to acquire the mining operations. It offered to take over the Mowana Mine from Leboam Holdings, however, the company had to pay the debts of Leboam including monies owed to Messina Copper, being employees benefits and other debts owed to other creditors.
The monies, were agreed to be paid through a scheme of compromise proposed by Max Power, being a negotiated payment schedule, which was subject to the financial ability of the new owners. “On December 9, 2021, Messina Copper liquidator, called a meeting of creditors, which the BMWU on behalf of its members (former Messina Copper employees) attended, to seek mandate from creditors to proceed with a proposed settlement for Messina Copper on the scheme of compromise. It is important to note that employee benefits are regarded as preferential credit, meaning once a scheme is approved they are paid first.”
A savingram the Ministry of Local Government and Rural Development sent to Town Clerks and Council Secretaries explaining why councilors across the country should not have access to their terminal benefits before end of their term has been revealed.
The contents of the savingram came out in the wake of a war of words between counselors and the Ministry of Local Government and Rural Development. The councilors through the Botswana Association of Local Authorities (BALA) accuse the Ministry of refusing to allow them to have access to their terminal benefits before end of their term.
This has since been denied by the Ministry. In the savingram to town councils and council secretaries across the country, Permanent Secretary in the Ministry of Local Government and Rural Development Molefi Keaja states that, “Kindly be advised that the terminal benefits budget is made during the final year of term of office for Honorable Councilors.” Keaja reminded town clerks and council secretaries that, “The nominal budget Councils make each and every financial year is to cater for events where a Councilor’s term of office ends before the statutory time due to death, resignation or any other reason.”
The savingram also goes into detail about why the government had in the past allowed councilors to have access to their terminal benefits before the end of their term. “Regarding the special dispensation made in the 2014-2019, it should be noted that the advance was granted because at that time there was an approved budget for terminal benefits during the financial year,” explained Keaja. He added that, “Town Clerks/Council Secretaries made discretions depending on the liquidity position of Councils which attracted a lot of audit queries.”
Keaja also revealed that councils across the country were struggling financially and therefore if they were to grant councilors access to their terminal benefits, this could leave their in a dire financial situation. Given the fact that Local Authorities currently have cash flow problems and budgetary constraints, it is not advisable to grant terminal benefits advance as it would only serve to compound the liquidity problems of councils.
It is understood that the Ministry was inundated with calls from some Councils as they sought clarification regarding access to their terminal benefits. The Ministry fears that should councils pay out the terminal benefits this would affect their coffers as the government spends a lot on councilors salaries.
Reports show that apart from elected councilors, the government spends at least P6, 577, 746, 00 on nominated councilors across the country as their monthly salaries. Former Assistant Minister of Local Government and Rural Development, Botlogile Tshireletso once told Parliament that in total there are 113 nominated councilors and their salaries per a year add up to P78, 933,16.00. She added that their projected gratuity is P9, 866,646.00.
A surge in consumer spending is expected to be a key driver of Botswana’s economic recovery, according to recent projections by Fitch Solutions. Fitch Solutions said it forecasts household spending in Botswana to grow by a real rate of 5.9% in 2022.
The bullish Fitch Solutions noted that “This is a considerable deceleration from 9.4% growth estimated in 2021, it comes mainly from the base effects of the contraction of 2.5% recorded in 2020,” adding that, “We project total household spending (in real terms) to reach BWP59.9bn (USD8.8bn) in 2022, increasing from BWP56.5bn (USD8.3bn) in 2021.” According to Fitch Solutions, this is higher than the pre-Covid-19 total household spending (in real terms) of P53.0 billion (USD7.8bn) in 2019 and it indicates a full recovery in consumer spending.
“We forecast real household spending to grow by 5.9% in 2022, decelerating from the estimated growth of 9.4% in 2021. We note that the Covid-19 pandemic and the related restrictions on economic activity resulted in real household spending contracting by 2.5% in 2020, creating a lower base for spending to grow from in 2021 and 2022,” Fitch Solutions says.
Total household spending (in real terms), the agency says, will increase in 2022 when compared to 2021. In 2021 and 2022, total household spending (in real terms) will be above the pre-Covid-19 levels in 2019, indicating a full recovery in consumer spending, says Fitch Solutions. It says as of December 6 2021 (latest data available), 38.4% of people in Botswana have received at least one vaccine dose, while this is relatively low it is higher than Africa average of 11.3%.
“The emergence of new Covid-19 variants such as Omicron, which was first detected in the country in November 2021, poses a downside risk to our outlook for consumer spending, particularly as a large proportion of the country’s population is unvaccinated and this could result in stricter measures being implemented once again,” says Fitch Solutions.
Growth will ease in 2022, Fitch Solution says. “Our forecast for an improvement in consumer spending in Botswana in 2022 is in line with our Country Risk team’s forecast that the economy will grow by a real rate of 5.3% over 2022, from an estimated 12.5% growth in 2021 as the low base effects from 2020 dissipate,” it says.
Fitch Solutions notes that “Our Country Risk team expects private consumption to be the main driver of Botswana’s economic growth in 2022, as disposable incomes and the labour market continue to recover from the impacts of the Covid-19 pandemic.” It says Botswana’s tourism sector has been negatively impacted by the Covid-19 pandemic and the related travel restrictions.
According to Fitch Solutions, “The emergence of the Omicron variant, which was first detected in November 2021, has resulted in travel bans being implemented on Southern African countries such as South Africa, Botswana, Lesotho, Namibia, Zimbabwe and Eswatini. This will further delay the recovery of Botswana’s tourism sector in 2021 and early 2022.” Fitch Solutions, therefore, forecasts Botswana’s tourist arrivals to grow by 81.2% in 2022, from an estimated contraction of 40.3% in 2021.
It notes that the 72.4% contraction in 2020 has created a low base for tourist arrivals to grow from. “The rollout of vaccines in South Africa and its key source markets will aid the recovery of the tourism sector over the coming months and this bodes well for the employment and incomes of people employed in the hospitality industry, particularly restaurants and hotels as well as recreation and culture businesses,” the report says.
Fitch Solutions further notes that with economies reopening, consumers are demanding products that they had little access to over the previous year. However, manufacturers are facing several problems. It says supply chain issues and bottlenecks are resulting in consumer goods shortages, feeding through into supply-side inflation. Fitch Solutions believes the global semiconductor shortage will continue into 2022, putting the pressure on the supply of several consumer goods.
It says the spread of the Delta variant is upending factory production in Asia, disrupting shipping and posing more shocks to the world economy. Similarly, manufacturers are facing shortages of key components and higher raw materials costs, the report says adding that while this is somewhat restricted to consumer goods, there is a high risk that this feeds through into more consumer services over the 2022 year.
“Our global view for a notable recovery in consumer spending relies on the ability of authorities to vaccinate a large enough proportion of their populations and thereby experience a notable drop in Covid-19 infections and a decline in hospitalisation rates,” says Fitch Solutions. Both these factors, it says, will lead to governments gradually lifting restrictions, which will boost consumer confidence and retail sales.
“As of December 6 2021, 38.4% of people in Botswana have received at least one vaccine dose. While this is low, it is higher than the Africa average of 11.3%. The vaccines being administered in Botswana include Pfizer-BioNTech, Sinovac and Johnson & Johnson. We believe that a successful vaccine rollout will aid the country’s consumer spending recovery,” says Fitch Solutions. Therefore, the agency says, “Our forecasts account for risks that are highly likely to play out in 2022, including the easing of government support. However, if other risks start to play out, this may lead to forecast revisions.”